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rjsbee
Junior Member
181 Posts |
 Posted - 21 April 2008 : 10:15:44
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We are going through house repsossession at present following my redundancy in Aug 07. I have been unable to find work since then.
After house repossession we will be left with a mortgage shortfall of c £70k ( ie negative equity ) and we also have unsecured debt of c £30k.
Obviously, if I am still out of work, bankruptcy is the only option as we do not earn enough to support any kind of payment plam / IVA. However if I get some work, is it a good idea to go for an IVA or still better to go bankrupt given the level of debt?
How much surplus income do we need if we are to go the IVA route?
Our income now is £1200 per month, expenditure the same however we are not paying any Mortgage, Rent at present. I was working in a well paid job receiving £2500 per month and a co. car hence the problem.
Advice anyone ?
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 21 April 2008 : 11:04:34
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Hi rjsbee,
Sorry to here of your situation and more sorry that in the current climate it is a common one.
The decision on the way forward is yours to make.
The level of contributions would depend on what is acceptable by your creditors with little or no assets and a heavy debt burden your contributions could be as much as £600 per month, but as I say this would depend on what the creditors are willing to accept. Payment via an IVA would likely be for five years.
With your income as it is and the uncertainty of whether or when this will improve Bankruptcy may seem to be the better option.
If you find your income increases during the twelve months as an undischarged Bankrupt you may find yourself subject to an Income Payment Agreement for a percentage of your disposable income, however this would only last for three years.
If you circumstances remain unchanged during the 12 month period you may find you are discharged before your income increases therefore there would be no income payment agreement to be paid.
I hope this helps
Kind Regards,
Brett England
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
View my personal story & blogs at:
http://brettengland.blogs.bankruptcyhelp.org.uk/ |
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melanie_giles
Senior Member
1191 Posts |
Posted - 21 April 2008 : 11:16:54
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Your situation is currently too uncertain for an IVA - and even if you were to get a better paid job now the IP would probably want to see at least three months of earnings before acting. I feel that bankruptcy proceedings would be a more sensible option given your current financial situation.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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rjsbee
Junior Member
181 Posts |
Posted - 25 April 2008 : 20:55:26
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Thanks for the advice so far ...
An update as of today is that I have secured a job commencing May at a salary of c £22000 pa
My court case for Repossession is on 13 May - new job will still not save me going through the repossession process. Question is:
After repossession we will still owe c 100k in unsecured debt. We should have c £700 per month available to pay creditors - should we try for an IVA or do we bite the bullet and declare ourselves bankrupt ? Help !!
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melanie_giles
Senior Member
1191 Posts |
Posted - 25 April 2008 : 21:15:03
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An IVA could certainly work for you if you have that level of disposable income, but this will not save the house. If you feel an obligation to repay your creditors to the best of your ability, then an IVA is a better way forward, but as you have no assets left which would be at rish under bankruptcy you may see this as a quicker and easier route. It's up to you really, and only you can make that decision.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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rjsbee
Junior Member
181 Posts |
Posted - 28 April 2008 : 18:05:47
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Thinking about our situation further, will it not be possible to come to an arrangement with the Mortgagor at the Court Hearing ( now that I have a job and some additional funds coming in )to pay an amount to the arrears each month and negotiate a bit more time in which to find alternative housing or until I hand back the keys for voluntary possession ?
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Helpful Advice
Average Member
United Kingdom
646 Posts |
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rjsbee
Junior Member
181 Posts |
Posted - 29 April 2008 : 22:44:03
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Another question I have going around in my mind at present ....
OK we are assuming that the house will be repossessed in the near future as a result of our primary Mortgagor progressing Possession.
As I have said above, we have a second Mortgage on the property with the two charges considerably more than the house value at present.
Do I presume right in that until the property has been sold off after possession, we do not know the extent of the debt still owing by ourselves and consequently need not go bankrupt until those details are known? |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 30 April 2008 : 09:34:09
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Hi Rjsbee,
You can declare Bankruptcy without knowing the amount, but would need to declare each secured lender as both a secured debt and unsecured debt this way you identify there will be a shortfall.
You can then explain the details to the examiner who will wait to see the outcome on sale of the property.
Kind Regards,
Brett England
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
View my personal story & blogs at:
http://brettengland.blogs.bankruptcyhelp.org.uk/ |
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Bankruptcy or IVA ?
